Free school meals threshold to hit Pupil Premium funding

As estimated one million pupils will miss out on Pupil Premium funding after changes to the Universal Credit system to introduce a threshold for free school meal eligibility get the go-ahead

Secondary schools are set to miss out on millions of pounds in additional Pupil Premium funding after the government passed reforms that will mean around one million children will become ineligible for free school meals (FSM).

As Universal Credit – the government’s much-maligned reform of how benefit payments are received by claimants – has been rolling out, all families in receipt of the new benefit have been automatically entitled to FSMs.

However, changes to the system will introduce an income threshold, meaning that families with net earnings of more than £7,400 will no longer be eligible for FSM.

Estimates by the Children’s Society suggest that about one million children living in poverty in England will miss out on FSM as a result.

The charity says that if the government continued to offer FSM to all families on Universal Credit, then two million children would benefit once roll-out is complete. However, under the threshold plan it says that only 700,000 of an estimated 1,700,000 school children living in poverty will receive FSM.

The government has said that blanket eligibility during Universal Credit roll-out was always intended as an interim measure and that no family currently in receipt of FSM will lose their entitlement.

Secondary schools receive £935 Pupil Premium per year for each child on FSM (with further funding of £1,900 for each looked after child).

Speaking in Parliament last month, Labour MP Sharon Hodgson, chair of the School Food All-Party Parliamentary Group, said that by removing the universal entitlement to FSM under Universal Credit, “the government is forcibly creating a cliff-edge that will be detrimental to families, especially children”.

“That seems utterly ludicrous,” she added.

Ms Hodgson pointed out that a parent with three children in their family who earns just below the £7,400 threshold would lose out on £1,200 in FSM support if they worked only a few hours more, or if they got a pay rise.

Such a family’s income would have to increase from £7,400 to almost £11,000 to make up for what they would lose if they became ineligible for FSM.

She added: “What we want to prevent is families avoiding pay rises or working more hours for fear that they will lose out. That is not making work pay, and it is not what the system was intended to do when it was set up.”

The old Working Tax Credit system provided an offsetting income boost at the point that FSM were withdrawn, Ms Hodgson said. Under Universal Credit, however, such mitigation does not exist.

Despite these concerns, a bid by Labour shadow education secretary Angela Rayner to block the changes failed in a Parliamentary vote by 312 to 254 last Tuesday (March 13).

During the debate, Ms Rayner said that by refusing to make the transitional arrangements permanent, ministers were “pulling the rug from underneath those families”. The changes will now come into effect from April.

The removal of automatic FSM entitlement for all Universal Credit recipients is not entirely unexpected. Last year, the then children’s minister Robert Goodwill said that all pupils whose parents are in receipt of Universal Credit would be entitled to FSM as “an interim measure”. It was always expected that this would be reassessed.

The government says that under its plans, “the vast majority (around 90 per cent) of pupils currently eligible for FSM will continue to be eligible”. Furthermore, the government claims that because the £7,400 threshold is measured before benefits are taken into account – as opposed to the old system when FSM eligibility was based on the number of hours worked – it will see 50,000 additional low-income families become eligible for FSMs by 2022.

Speaking last week (March 13), Iain Duncan Smith, the former work and pensions secretary who was the architect of Universal Credit, said: “Transitional protection was designed to protect those moving from tax credits into Universal Credit so that they did not – if this would have happened to be the case – lose any money in the transition.” It was not, he added, about permanently granting access to FSM to all Universal Credit recipients.

The Children’s Society said that although Pupil Premium payments are currently based on FSM, there were a range of options open that could allow the two policies to be “decoupled”. Indeed, schools already miss out on Pupil Premium funding because many children are not registered for FSM despite being entitled. DfE figures show that nationally 11 per cent of eligible children are missing out.

The National Association of Head Teachers (NAHT) has long called for automatic FSM enrolment and says that the data required to do this is already available and simply needs to be shared with schools.

Paul Whiteman, general secretary of the NAHT, said: “Auto-registration for FSMs would mean that more children get the support they are entitled to, as well as boosting Pupil Premium funding to support their education.”